Q3 2024 Trade Desk Inc Earnings Call
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Speaker Change: I will now turn the conference over to your host Chris told you.
Speaker Change: You may begin.
Speaker Change: Thank you operator, Hello, and good afternoon to everyone and welcome to the trade desk third quarter 2024 earnings conference call on the call today are co founder and CEO, Jeff Green and Chief Financial Officer, Laura Shanghai, a copy of our earnings press release is available on our website in the Investor Relations section at the trade desk Dot Com. Please note that aside from historical <unk>.
Speaker Change: Information today's discussion and our responses during the Q&A may include forward looking statements. These statements are subject to risks and uncertainties and reflect our views and assumptions as of the date such statements are made actual results may vary significantly and we expressly disclaim any obligations to update the forward looking statements made today.
Speaker Change: Many of our beliefs or assumptions prove incorrect actual financial results could differ materially from our projections or those implied by these forward looking statements for a detailed discussion of risks. Please refer to the risk factors mentioned in our press release and our most recent SEC filings. In addition to our GAAP financial results, we present supplemental non-GAAP.
Speaker Change: Financial data a reconciliation of the GAAP to non-GAAP measures is available in our earnings press release, we believe that presenting these non-GAAP measures alongside our GAAP results offers a more comprehensive view of the company's operational performance with that I will now turn the call over to co founder and CEO, Jeff Green Jeff.
Jeff Green: Thanks, Chris and thank you all for joining us today as you've seen from our press release, we again posted very strong growth in the third quarter. Our revenue grew 27% compared with Q3 last year, marking strong revenue growth acceleration on both a sequential and a year over year basis.
Jeff Green: Quarter after quarter, we continue to gain market share outpacing the industry and our peers, both large and small.
Jeff Green: Even though it is now a considerable part of our business CTV continues to be our fastest growing channel and it shows no sign of slowing down.
Jeff Green: Partners like Disney NBC, you, Walmart Roku, LG, Netflix and many others are deepening their relationships with us.
Jeff Green: The growing CTV opportunity I could not be more excited about our position in CTV and the size of the growth opportunity for us in the years ahead.
Jeff Green: With our leadership in CTV as well as other areas such as retail media identity measurement and data, we are winning more business with both new and existing customers.
Jeff Green: We are signing more multi year joint business plans with leading agencies and brands in fact over 40% of our business. This year will fall under J b piece, representing spend projections in future years, well into the billions of dollars.
Jeff Green: I have great optimism that the trade desk will continue to outperform the market and gained significant share.
Jeff Green: Existing this year, we are set up exceptionally well for 2025 and beyond.
Jeff Green: As we continue to execute in areas, such as CTV retail media and in markets outside of the United States.
Jeff Green: I want to start at the core of my remarks by explaining why I believe our industry is changing at an unprecedented rate I believe there is more opportunity for the trade desk than ever before but in order to understand the significance of our opportunity we have to contextualize the macro changes and their effects on media.
Jeff Green: AD Tech and the biggest forces and digital advertising.
Jeff Green: Let's go through 10 significant landscape changes and why these are creating what we see as sustainable secular tailwind.
Jeff Green: The trade desk, so long as we navigate changing conditions and position ourselves and our clients to benefit from the changes.
Jeff Green: The first significant landscape vector that is creating a tailwind for the trade desk is the macro environment itself, but those of you listening or reading. This know all too well the fat has been fighting inflation by raising rates one simple way to frame. This relevance to our world is that inflation is measure primarily using <unk>.
Jeff Green: Price increases implemented by our clients on products, we advertise for around the world.
Jeff Green: The change in fiscal and monetary policies around the world I mean, the consumer has been forced to reconsider the cost benefit of every product. They buy advertising plays a bigger role in establishing which brands and which products win market share and which lose market share.
Jeff Green: The second significant macro factors related and that's the CMO is have more pressure than ever to produce real growth and prove it with data. While there has been a lot of macro focus on the reduction in inflation rates historic highs for stock market indices and growing indications of a soft landing.
Jeff Green: That's not necessarily translating to consumer confidence, which is why as gmos are becoming much more closely aligned with our cfo's cfo's want more evidence than ever that marketing is working and for Cfos that doesn't just mean traditional marketing kpis. It means growing the topline business all of our.
And data science injection into Cotai, our latest product release is encouraging CMO and CFO to lean more and more on TTP to deliver real measured growth.
Jeff Green: The third macro tailwind that are setting up the trade desk for continued outsized gains is the move to a.
Jeff Green: Every company needs, an AI strategy, our AI products power is a great co pilot for traders, but this is only the beginning there are endless possibilities for us as we have one of the best data assets on the Internet the learnings that come from buying the global open internet outside of wall scar.
Jeff Green: <unk>.
To win in this new frontier, we're looking across our entire suite of products algorithms and features and asking how they all can be advanced by AI. We have teams focused on incubation and we've developed team structures to create checks and balances among our distributor development teams.
Jeff Green: This way, we know the effect of complex AI products and measure the outputs and inputs of each of them.
Jeff Green: We expect to talk about these efforts and their results over the coming quarters and years, we're positioned to benefit from our objectivity, our focus our scale and the loyalty of our buyers.
Jeff Green: We're already seeing the results of Coke high performance today, but we're just getting started.
Jeff Green: The fourth factor that is changing the entire landscape of digital advertising and AD tech or the changes happening at Google.
Jeff Green: Google has an incredibly dominant moneymaking business.
Jeff Green: In search and another in Youtube.
Jeff Green: They also have an incredible opportunity in cloud and AI, most notably in Gemini.
Jeff Green: Because of the AI race, and Big Tech and these opportunities Google could continue to downgrade their network business to focus on those prospects. After all they operate at a disadvantage in the large buyers of the buy side of the open internet to the trade desk, because Google laptop.
Jeff Green: Objectively.
Jeff Green: If these pressures weren't enough on Google. They also have a pending antitrust trial that has created massive ripples throughout the global AD Tech ecosystem.
Jeff Green: The outcome of the trial itself is less important than the change in behavior that will likely comment Google no matter what.
Jeff Green: Whatever the outcome of the trial I do believe that Google will become more cautious if not less involved in.
Jeff Green: In the part of their business, where they compete with us.
Jeff Green: First off they are and will remain under tremendous scrutiny in this market, whether it's from U S regulators or there are many of equivalents around the world.
Jeff Green: By contrast, the convoluted role they play laid out very clearly by the U S Department of Justice and their network business is likely to play more fairly one way or another.
Jeff Green: I point this out because it presents tremendous opportunity for our business and for the broader AD Tech ecosystem.
Jeff Green: I have never been more excited about the value of the premium content at scale on the open Internet combined with new approaches to performance efficacy, especially in contrast to the murky newness of cheap reached dynamics within walled garden such as Google.
Jeff Green: The fifth macro vector, creating incremental secular tailwind or changes in the market dynamics of CTV, it's hard not to be bullish about CTV. When it is both our largest channel and our fastest growing.
Jeff Green: Advertisers can see more clearly the contrast of our offering and the role we play with brands and agencies with walled gardens than ever before.
Jeff Green: This year, we've really started showcasing the strength of the sellers and publishers available on our platform and on the open Internet.
Jeff Green: We've even publish a list of 100 of the best destinations on the open Internet. When you contrast, the quality of the open internet with the perils of UGC, it's easy to see that the best of movies, the best of TV and the best of sports divest of journalism and the best of Muse.
Jeff Green: It can podcast represented something more valuable to society and to advertisers than short videos and user generated content surrounded by comments sections that are often not good for brands.
Speaker Change: At the trade desk, we've also been talking a lot about the premium open internet because that is where consumers are increasingly spending most of their time companies like Netflix Roku, NBC, Spotify Disney and Fox along with many others have redefined the consumers internet experience over the last few years.
Speaker Change: They all recognize the power of advertising to fund the amazing content experiences that their consumers have now come to expect and they are all investing in the capabilities to capitalize on advertiser demand.
Speaker Change: This point is worth reiterating because of some of the macro inventory dynamics and digital advertising you may recall, three or four years ago I would talk on these calls about inventory scarcity, especially in CTV in the fourth quarter.
Speaker Change: Which was enjoying a significant surge because of people spending more time streaming at home during the global pandemic and.
Speaker Change: And the advertisers chase those viewer eyeballs to new streaming platforms advertising inventory was scarce.
Speaker Change: And with demand rising Cpm's went up.
Speaker Change: But CTV inventory isn't scarce in the same way anymore.
Speaker Change: Because over the last couple of years every major media company has launched a streaming service in all of them have embraced advertising as a key way to fund their content and growth.
Speaker Change: As inventory scales and scarcity decreases advertisers have a lot more choice.
Speaker Change: They also have a harder job, which is assigning value to a lot more inventory.
Speaker Change: Now, it's about the quality of the inventory as well as the quality of the signal.
Speaker Change: You may remember at our last Investor day that we showed a graph of what our clients were willing to pay for CTV AD impressions on the open market in many cases, we bid significantly higher than the price that the media companies, we're negotiating indirect deals the.
Speaker Change: The content arms race is more intense and more expensive than ever and media companies need to monetize their content as effectively as possible two.
Speaker Change: Two weeks ago variety reported that the top six media companies will increase content spending this year by 9% to a record $126 billion all of which needs to be funded.
Speaker Change: Without the benefit of scarcity media companies now need to provide advertisers with more insight one of my buyer, who my Ricci.
Speaker Change: It feels like the UAV to an open path or helping provide that signal and it's no surprise that platforms like box, who are among the first to embrace these tools are benefiting the most one major news publisher, who has deployed to open path. So that they can gain a clearer understanding of what our clients are willing to.
Speaker Change: PE solve their fill rate increased by seven acts leading to a revenue increase of more than 25%.
Speaker Change: The sixth positive secular force, helping the trade desk.
Speaker Change: Is pressure to make the supply chain better.
Speaker Change: Advertisers and publishers are two end points of the supply chain and pressure on the edges, meaning the endpoints means pressure on the whole supply chain how.
Speaker Change: How is this good for us as perhaps counterintuitive there are many players in AD tech that are focused on extracting the highest margin possible. In contrast, we have been focused on adding more value than we cost or charge.
Speaker Change: We do this because it is the right thing to do but also because it engender loyalty from our clients and because it is the very essence of economically sustainable.
Speaker Change: At this moment the advertising ecosystem is in the process of refining its supply chain.
Speaker Change: To become definitively more efficient and walled gardens with more objective and independent measurement to prove its efficacy.
Speaker Change: Companies focus on extraction will likely lose share.
Speaker Change: The company's focus on adding value will likely gain market share.
Speaker Change: There are many in our industry, who share the ethos to add value and we're aiming to partner with nearly all of them.
Speaker Change: However, there are many that don't.
Some who take a more short term approach and are just looking for arbitrage opportunities or places where they can create the quick illusion of value at the expense of agencies advertisers or sellers and publishers.
Speaker Change: I do believe like most markets that AD Tech will go through a long arc that will bend toward market efficiency and transparency. It's just a question of how quickly we get there.
Speaker Change: And in this moment, we have an opportunity to accelerate that progress there will be more focused than ever on who is adding value and at what cost to advertisers and sellers and publishers.
Speaker Change: Considering the potential prioritization changes happening at Google.
Speaker Change: In a world, where Google is more cautious on the open Internet a brighter light will shine on the value that everyone provides in the AD Tech supply chain I have long said that everyone in our industry should provide more value to the market. The next trial.
Speaker Change: That's a principle, we've always followed.
Speaker Change: Advertisers are under more pressure than ever to do more with less.
Speaker Change: Sellers and publishers, which is of course, our term for content owners and the companies who own that content are fighting harder than ever to take home as much of the C. P M as possible and simultaneously increase their fill rates.
Speaker Change: And they want the advertising ecosystem to be as efficient and transparent as possible. That's why most are so eager to partner with us on initiatives like the U I D to an open path. So they can provide advertisers with as much signal and transparency as possible and so advertisers can value their ad impressions as accurately as.
Speaker Change: Possible in the context of reaching their target audiences.
Speaker Change: The seventh macro vector that I want to talk about today are the trends happening in audio.
Speaker Change: I wanted to highlight that many have wrongly define the advertising Tam of audio to some sort of comparison to legacy radio.
Speaker Change: Because the biggest players in audio are global and because digital provides potential for far fewer and more relevant ads I'm convinced.
Speaker Change: If the biggest players move correctly, they can capture one of the biggest opportunities in advertising and media today, which is the delta between time spent in the audio channel and the amount of AD budgets heading into that channel.
Speaker Change: Digital audio is at the early stages of its evolution.
Speaker Change: The channel is in a similar position to what we're see T V was a few years ago.
Speaker Change: Consumers in the U S spend an average of three hours per day consuming digital audience up significantly over the last five years and advertisers are eager to capitalize on this emerging advertising channel.
Speaker Change: At the moment advertisers are looking for clear trust and signals to inform what they bought trust, but verify has become our mantra around the open internet.
Speaker Change: Just a few weeks ago media reported on our major expanded partnership with Spotify, They will be deploying both UAV too and open path. So that advertisers can find as much addressable 80 and insight as possible.
Speaker Change: For Spotify is high value AD impressions I don't think there's a company in the media universe, that's been more successful than Spotify and building a subscription model.
Speaker Change: In the audio World Spotify gives us access to almost all of the world music or a low monthly subscription in many ways Spotify has been at the forefront of this mass consumer shift to digital audio.
Speaker Change: I think they're in the process of becoming well positioned to get incremental users due to a good AD experience and to get incremental AD budgets for the exact same reason you only have to listen to their most recent earnings report to understand how seriously. They are taking the AD supported side of their business and building out there.
Speaker Change: Chromatic capabilities over the next several years, we are very excited to partner with them in this work and to help our advertiser clients make the most of this fast growing channel, where our listeners are highly engaged and leaned in.
Speaker Change: Our partnership with Spotify is one of the inventory partnerships that I'm most optimistic about.
Speaker Change: The eighth macro vector aiding in our outsized growth is the massive opportunity around retail media to summarize this at a high level Amazon has showcase to retailers around the world the benefit of using retail purchase data to make retail businesses work better if advertisers advertise.
Speaker Change: <unk> people like and want and frequently buy at their stores like Walmart or target or albertsons or dollar general for many many others those retailers of course, we'll sell more product.
Speaker Change: The company is making and selling the products.
Speaker Change: The significance of this vector and the role it's played in our success. The past few years deserves a much larger space of time, which I expect to do in the coming quarters.
Speaker Change: The ninth macro tailwind is the changes happening in live sports.
Speaker Change: Of course sports is some of the most premium and most expensive content and media.
Speaker Change: He says it is often scarce and often highly sought out by brands and it changes very quickly. It really is built or programmatic advertising the best moments in sports are surprises and unpredictable. That's what makes them. So exciting. However, it's also what makes them hard to plan around and to price properly.
I expect over the coming years to see programmatic spot markets and sports become best friends.
Speaker Change: We are enjoying our strongest year to date with live sports is the football season has kicked off here in the United States. We are looking at on average $1 5 billion AD impressions per weekend.
Speaker Change: We have dozens of major brands by and book all through our platform for the first time and many others increasing spend in the triple digit range.
Speaker Change: One example is a major quick serve restaurant chain here in the United States.
Speaker Change: This client had been advertising on traditional linear TV, but with its customer base, mostly aged over 45.
Speaker Change: And restaurant visits among that demographic decreasing they wanted to expand their customer base to reach younger adults and young families using CTV.
Speaker Change: Working with our agency happy Cog and their partner clever. This restaurant chain worked with us to target their audience with a specific focus on live football opportunities on CTV, followed up with online video and display.
Speaker Change: All in an omnichannel approach.
Speaker Change: Our platform enabled the restaurants to target their audiences with precision and use new measurement tools to understand the impact of those ads on brand and 10 <unk>.
Speaker Change: As a result, this client saw 15% increase in brand awareness among their target audience and a 9% increase in mobile transactions, where CTV was the first AD server.
Speaker Change: This is a great example of how programmatic on our platform is driving high value business results.
Speaker Change: The 10th macro trend, helping us grow is this net effect of all of these changes at once.
Speaker Change: I've said publicly a few times that the biggest thing Google has going for it and its defense against the Department of Justice is complexity, it's hard to make sense of this industry and all of the forces changing it so rapidly.
Speaker Change: Our clients need help they're navigating unprecedented change and unprecedented pressure.
Speaker Change: Fortunately, our buy side focused and our objectivity aligns our interest with our clients and positions us to stand with agencies and brands shoulder to shoulder as we face supply chain changes that ultimately benefit the open internet and the market, but will require adjustments across the ecosystem.
Speaker Change: We're here to help and have proven ourselves to be one of the leaders of the open internet.
Speaker Change: All of these 10 macro forces when joined with our amazing team, our global footprint, our buy side focused and our amazing product, including the recent platform overhaul townhome Tokai are showing the early signs of the future promise of our innovations our objectivity, our AI and our company.
Speaker Change: Clients are seeing performance upgrades around the world many of whom are embracing new approaches to the objective data driven measurement the trade desk offers.
Speaker Change: So as we exit 'twenty 'twenty four and look forward to 2025, the trade desk is better positioned than we have ever been.
Speaker Change: 'twenty 'twenty four has been a banner year for CTV and we have further cemented our position as the first choice platform to help leading brands as they continue to shift their budgets from linear TV and UGC into CTV.
Speaker Change: Retail media has rapidly become one of the fastest growing areas of our business a trend we expect to accelerate through 2025 retail data on our platform is transforming how many CPG advertisers approach measurement and attribution.
Innovations in coke higher, helping advertisers identify and target new potential customers with much greater precision.
Speaker Change: Data elements per impression continue to increase resulting in significantly better performance, helping unlock budgets and win new business.
Speaker Change: Our premium content partnerships activated through supply cost innovations such as open path and the sellers and publishers 500, plus marketplace are helping advertisers value in select AD impressions with more objectivity than ever innovations like you I D. Two which has reached critical mass are.
Speaker Change: Helping advertisers pioneer better approaches to address ability in a changing identity environment and our investments in new measurement capabilities from the TV quality index to our growing network of retail data partners are helping advertisers prove the efficacy of their campaigns in new objective.
Speaker Change: Ways.
Speaker Change: Let me conclude by underlining that taken together these initiatives along with many others positioned the trade desk very well for market leading growth in the years ahead I believe it is worth noting again, we continued to significantly gained market share I believe our level of relative outperformance 27.
Speaker Change: Percent revenue growth in the third quarter is indicative of the value we are delivering to our clients as they deal with an uncertain consumer environment. We continue to sign J b piece with brands and their agencies and a very strong pace with billions of dollars transacted through these partnerships each year now.
Speaker Change: I believe we will look back on 2024 as an inflection point in terms of how advertisers value the premium open internet.
Speaker Change: Driven by CTV and digital audio as a compelling alternative to walled gardens, and I expect to advertisers will emerge in 2025 more empowered than ever to drive data driven precision as a result, we will continue to gain share.
And with that I'll hand, it over to Laura to cover our financials.
Laura Shanghai: Thank you, Jeff and good afternoon.
Laura Shanghai: As our third quarter results demonstrate the trade desk is executing at a high level outpacing peers in capturing increased market share.
Laura Shanghai: We achieved a robust accelerating year over year revenue growth, while delivering outstanding profitability and cash flow.
Laura Shanghai: Key investment initiatives, including performance advancements in our Coke high platform expansion in CTV retail media and supply chain innovations like our open path technology are not only strengthening our foundation, but position us for durable growth in 2020 five and beyond.
Laura Shanghai: Turning to our results revenue in Q3 with $628 million representing growth of 27% year over year accelerating from the prior quarter and year over year.
Laura Shanghai: We continue to win more share of our clients' advertising budgets as they increasingly prioritize platforms like the trade desk that deliver high value results, especially in premium video and CTV.
Laura Shanghai: This trend is a familiar dynamic in our industry that we witnessed many times over the years.
Laura Shanghai: When cmo's face pressure to achieve more with less they turned to platforms like ours for flexibility precision and measurable results.
Laura Shanghai: During the third quarter CTV, let our growth from a scaled channel perspective once again.
We saw strong momentum in our retail media as we continue to win incremental shopper marketing budgets.
Laura Shanghai: International spend growth outpace North America, once again with notably strong performance in CTV.
Laura Shanghai: With the strong top line performance in Q3, we generated approximately $257 million and adjusted EBITDA or about 41% of revenue and free cash flow of $222 million.
From a scaled channel perspective C.
Laura Shanghai: CTV by a wide margin led our growth again during the third quarter in.
In Q3 video, which includes CTV represented a high forty's percentage share of our business and continues to grow as a percentage of our mix.
Laura Shanghai: Mobile represented a mid thirties percentage share of spend during the quarter.
Laura Shanghai: Display continues to represent a low double digit percent share of our business and audio represents around 5%.
Laura Shanghai: Geographically North America represented about 88% of our business in Q3 and international represented about 12%.
Laura Shanghai: We are pleased that our AD spend outside North America grew at a faster rate year over year that inside of North America as has been the case for the last seven quarters in a row.
Laura Shanghai: CTV continues to drive our growth across both EMEA and Asia Pacific.
Laura Shanghai: We see significant opportunities to capture more share in these regions in the quarters and years ahead.
Laura Shanghai: In terms of verticals that represent at least 1% of our spend growth was broad based again this quarter.
Laura Shanghai: We saw strong performance in the majority of our verticals, particularly in medical health, which includes advertising related to health care and pharmaceuticals.
Laura Shanghai: As well as home and garden and pet.
Laura Shanghai: Political spending was also strong in Q3 as expected.
Family relationships and healthy living verticals were both below average.
Laura Shanghai: Overall, we saw healthy trends across categories and we continue to believe there is opportunity for us to gain share in all of the verticals we serve.
Laura Shanghai: Turning now to expenses.
Laura Shanghai: Excluding stock based compensation operating expenses in Q3 were 391 million up 24% year over year.
During the third quarter, we continued to invest in our team our platform and our infrastructure to support sustained growth.
Laura Shanghai: Income tax expense was $33 million for the third quarter, driven primarily by our pretax profitability and nondeductible stock based compensation.
Laura Shanghai: Adjusted net income was $207 million or 41 cents per fully diluted share net.
Net cash provided by operating activities was $273 million for Q3, and free cash flow with $222 million.
Laura Shanghai: Dsos exiting the quarter were 89 days down two days from a year ago.
Laura Shanghai: P. P. O. This were 74 days down one day from a year ago.
Laura Shanghai: In Q3 via our share repurchase program, we repurchased $54 million of class a common stock.
Laura Shanghai: We will continue to approach the repurchase program opportunistically, depending on market conditions and capital priorities.
Laura Shanghai: We exited the third quarter with a strong cash and liquidity position cash.
Cash cash equivalents and short term investments ended the quarter at $1 7 billion, we have no debt on the balance sheet.
Laura Shanghai: Turning to our outlook for the fourth quarter, we continued to see strong spend in our key areas such as CTV retail media and political we estimate Q4 revenue to be at least $756 million, which would represent growth of about 25% on a year over year basis.
Laura Shanghai: We estimate adjusted EBITDA to be approximately $363 million in Q4.
Laura Shanghai: In closing we are extremely pleased with our strong performance in the third quarter and we are cautiously optimistic for Q4.
Laura Shanghai: We continue to gain momentum across our biggest priorities delivering profitable growth and significant share gains.
Laura Shanghai: As we look ahead to the remainder of Q4 and 2025, we believe we've never been in a better position than we are today.
Laura Shanghai: With large growth drivers, including the ongoing secular shift to CTV.
Laura Shanghai: Upgrading measurement with retail data.
Expansion outside North America, a strong identity framework strengthening of the supply chain and the ability to drive leverage in our model, we remain optimistic for many years to come.
Laura Shanghai: That concludes our prepared remarks, and with that operator, let's open up the call for questions.
Laura Shanghai: Okay.
Speaker Change: Certainly and thank you at this time, we will be conducting a question and answer session. If you wish to ask a question. Please press star one on your telephone keypad.
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Speaker Change: One moment, while we poll for questions.
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Speaker Change: The first question today is coming from Shyam Patil from Susquehanna Sham. Your line is live. Please go ahead.
Speaker Change: Hey, guys great job on the strong growth and the results I just had one.
Speaker Change: Bigger picture question.
Speaker Change: Jeff can you talk a little bit more about it.
Speaker Change: What you're seeing in terms of the near term macro for three key one for Hugh and then.
Speaker Change: For next year, how you view, the macro and setup for trade desk. Thank you.
Speaker Change: You bet.
Speaker Change: Thanks, John for the question and amplified words, so first I.
Speaker Change: I just want to point out that.
Speaker Change: The most significant macro vectors that I can talk about are the things that we itemized in the prepared remarks so.
Speaker Change: We've taken more time this time.
Speaker Change: To talk about the macro factors that are affecting us, especially into next year.
Speaker Change: In the prepared remarks. This time, so I'd just encourage everybody to spend a little bit more time with them because we spent a little bit more time to prepare them.
Speaker Change: As it relates to the here and now, though I'm incredibly proud of our performance in the third quarter and we are currently firing on all cylinders, whether that's what's happening in CTV being both our largest channel and our fastest growing which those two things don't usually go hand in hand or be amazed.
Speaker Change: Efforts in Coca you know it started the year as an engineering effort and its sense turned into both in engineering effort as well as our sales and client services teams getting that adopted the adoption has been phenomenal.
Speaker Change: The product is the best that we've ever shipped.
Speaker Change: So a lot going for us in that.
Speaker Change: He too has become the primary currency of identity in the open Internet.
And then of course, we have so much going for us in retail media and supply path optimization.
Speaker Change: I really do believe we're in a stronger position than we have ever been.
Speaker Change: As it relates to the to the macro market sort of in the here and now I do want to just highlight that Cmos are dealing with a lot of uncertainty.
Speaker Change: And a lot of scrutiny and the uncertainty they've seen a lot of over the last few years, but the scrutiny I don't know that it's been been more than they have right now.
Speaker Change:
And as a result brands are under pressure to grow and that is good for us.
Speaker Change: So even though it's a little bit tenants for the market. It's good for us because they're turning to us saying how can we help.
Speaker Change: And I do want to also highlight that there is a difference between the stock market being at an all time high and consumers.
Speaker Change: Feeling as confident as they've ever been and that that is not where many consumers are especially sort of on the left side of the bell curve. So if you make less than the median household income than you were more affected by price and if you're selling products to those people than it is probably affecting your business more than others and so is it.
Speaker Change: Salt some brands are in a phenomenal position and some are in a more difficult position in this current market as they face inflation and consumer weakness changes in interest rates at all of the implications as to how our products need to be marketed as a result, they need to be more agile more focused on efficacy more focus on efficiency then.
Speaker Change: Ever before and so what we do which is give them more data and honestly give them control of their own future.
Speaker Change: It means that they are leaning in more than they ever have.
Speaker Change: Before theyre looking for solutions to.
Speaker Change: To help them.
Speaker Change: But when you when you couple that with Y programmatic advertising is the leading source of growth and advertising which is that.
Speaker Change: Of course, we've been outperforming the market of course, it's a place where you can put data to work on a case by case basis and optimized for a personalization of course, when you're when you're using data driven advertising and marketing that is the very best place to inject.
Speaker Change: I N distributed models and the way that we have and then of course, when we take our joint business plans and all the other efforts that we have we're in a really phenomenal position.
Speaker Change: One other thing I just want to highlight.
Speaker Change: Is it a.
Political in both Q3 and Q4 was as expected as it's been very strong.
Speaker Change: And but we are mindful that some brands are not as interested as advertising and a polarized political environment.
Speaker Change: So those dynamics have made things a little bit different in this Q4 than in other Q4s.
Speaker Change: One other thing that also gives me a tremendous amount of optimism for the future is that some of our most significant.
Speaker Change: Partnerships, whether that's netflix or disney or roku, or or Fox or Spotify or all in what I would call. The crawl phase of our partnership we've done some amazing things with some of those others. We've only talked about doing amazing things and we've done just sort of testing the pipes.
Speaker Change: But I think the very best is yet to come and all of those partnerships.
Speaker Change: And so in the short term, they're making small contributions.
Speaker Change: But I think.
Speaker Change: The best is yet to come and all of that and I'm sure. We'll talk about open path and some other things later, but that gives you a sense of what we're facing in the short term.
Jeff Green: Thanks, Jeff.
Speaker Change: Thank you. Your next question is coming from Vasily <unk> from Cannonball Research, especially your line is live. Please go ahead.
Speaker Change: Hi, Jeff I have a question about Google as they remain under pressure from regulators. What are you seeing in the market in terms of how is it easier is it harder for you to get to win spend from brands.
Speaker Change: And then with Gogo network business, continuing its negative with negative growth does the trade desk really have any preference and what happens.
Speaker Change: In this Doj trial. Thank you.
Speaker Change: You bet. Thank you.
Speaker Change: Appreciate the question so first a little bit of context as you know the department of Justice already concluded one of its trials.
Speaker Change: <unk>, Google and out of search.
Speaker Change: And the department of Justice one.
Speaker Change: And I would argue that the case that the department of Justice has against Google on the AD Tech side is even more compelling.
Speaker Change: It is more compelling, but it's also a more complicated which makes it.
Speaker Change: A little bit harder to predict but I.
Speaker Change: I think the case is incredibly compelling for the government.
Speaker Change: But regardless of what happens I believe we will we will win.
Speaker Change: And I do want to underlying the things that I said in the prepared remarks, Google is a phenomenal company I think they have a tremendous amount of opportunity ahead of it as it relates to.
Speaker Change: Search and in cloud and in AI and Gemini, but it is clear that they have been de prioritizing network and it has not performed the way that the rest of their business has.
Speaker Change: Hey, if I were in some of our shoes I would prioritize it too because of the opportunities that they have in those other products as well as just the nature of their business, which is pretty dependent on them, making very high margins on media that has a cost of goods sold that is probably low.
Speaker Change: And the premium content of the Internet does not have a low cost of goods sold and therefore, it makes it hard to move the needle.
Speaker Change: On our P&L as big as Google's.
Speaker Change: So I anticipate that they will be prioritize it.
Speaker Change: But even if they don't what I think is inevitable as a Google has to play more offense.
Speaker Change: What it has clearly come out in the trial is that they have not always play there.
And that might be the understatement of the call.
Speaker Change: We have managed to win in an unfair market I believe they will be forced.
Speaker Change: Whether that's from government or just by their own choosing because this risk reward is not worth it so.
Speaker Change: So by their own choosing I think they would.
Speaker Change: To make the market more fair and therefore make it easier for us to do well.
Speaker Change: So that's why I'm I maintain that regardless of what happens in the trial itself I believe that will do well and that will continue to win.
Speaker Change: I think there are scenarios, where the landscape looks very different depending on what happens to Google and regulation, especially on the supply side, which is at the core of the government's case, which underlines the fact that that.
Speaker Change: Don't think anybody is disputing as it relates to the trial itself at the trade desk will continue to do well. So I think we're in a great position I'm very excited to see the outcome and I think we win no matter what thanks for the question.
Speaker Change: Thank you.
Speaker Change: Thank you. Your next question is coming from Jessica Reif Ehrlich from Bank of America. Jessica Your line is live. Please go ahead.
Speaker Change: Thank you hijacked we've seen the trade desk deployed many initiatives over the years focusing on the supply chain from the gold standard for S. S. P. T y E. Two.
Speaker Change: S&P 500, plus now open past can.
Speaker Change: Can you wrap this all together and speak about how the work you've done on the supply chain with open path and what this initiative means.
Speaker Change: Can mean to the value of the value.
The trade desk with its partners over the next several years and I guess secondarily when.
Speaker Change: When do you scale because as you said during the crawl phase with many of the users of open a task I mean, just starting like Disney and Fox et cetera, and some that you've mentioned like Netflix not even on the platform yet.
Speaker Change: Uh huh.
Speaker Change: Thank you so much I appreciate the question a lot to unpack there. So let me first just give a little bit of history. So that you and I bring everyone along in this question.
Speaker Change: So.
Speaker Change: I Love that you would know about it because we werent very public about the gold standards back in 2017, but we certainly talk to SSP and AD exchanges about it.
Speaker Change: I would essentially summarize that effort as us same to the sell side here is the sort of signaled that we would like to see and we're just going to tell you in advance when we see that signal or more likely to bid up because these are the things that that give us indication of value. We haven't always done that in the past.
Speaker Change: But we did start doing that in 2017 as you know you Ivy Chu with an effort to make identity ubiquitous across the internet. When we first announced it a number of companies suggest that we would never be successful because they thought we'd have to get 2 billion consumers to sign up for us to have.
Speaker Change: Any sort of a footprint and we explained then that our play was not.
Speaker Change: To go sign up 2 billion consumers or to go direct.
Speaker Change: But instead to partner with the infrastructure of the Internet and we've done that across the board.
Speaker Change: Then.
Speaker Change: As you pointed out.
Speaker Change: In the last two years, we've launched two initiatives one is the salary from publisher 500, plus as well as the open path.
Speaker Change: TV publishers 500, plus Ah is meant to make it easier for people who are currently buying private marketplaces, which often have really slowed or small trickles of inventory and they don't necessarily realize how much they've limited their decisioning power bi.
Speaker Change: Only considering a small amount of inventory.
Speaker Change: By selecting some of the most prominent and say parts of the open Internet.
Speaker Change: To buy across all of it they expand their ability to find value.
Speaker Change: Because many times the reason people enter into private marketplaces is simply to be safe.
Speaker Change: And so and giving them a very say large ecosystem for them.
Speaker Change: To buy into that.
Speaker Change: Yes, I mean that will just continue to promote and make it accessible and provide transparency into what what of course they are buying.
Speaker Change: But open path it might've be aside from USD two the most significant.
Speaker Change: Venture of all of them and.
Speaker Change: And then all open path is is our willingness to go one step further from gold standard and.
Speaker Change: And share with the sell side exactly what we're willing to pay on any given impression opportunity.
Speaker Change: And the reason why we do that is because.
Speaker Change: There are many publishers who are saying.
Speaker Change: I don't have any idea what you're willing to pay because of all of the companies that exist between us.
Speaker Change: And it's a way for them to hold them accountable to earn their keep some have wrongly assumed this is us trying to cut them out it is not it.
Speaker Change: That as I was trying to.
Speaker Change: And power of the publishers to make certain that they earn their keep.
Speaker Change: And the reason for that is that we are competing with walled gardens were competing with the most successful companies in the history of advertising companies like Facebook and some things like Google.
Speaker Change: Those walled gardens have one advantage, which is that they control the supply chain end to end.
Speaker Change: And therefore they are not.
Speaker Change: At the risk of players in the middle of the supply chain extracting too much and then.
Speaker Change: Decreasing the value proposition of those that participate in the entire.
Speaker Change: Open internet rather than just in a particular walled garden.
Speaker Change: And too often and advertiser pays a dollar and less than 50 cents ends up on the pump.
Speaker Change: In the pocket of the publisher.
Speaker Change: So open path is a bit of a mixed metaphors or to at least use two of them. It's a bit of a light on the hill as well as a canary in the coal mine buyers.
Speaker Change: Buyers get better visibility into the overall supply chain.
Speaker Change: And the reason why I say it light on the Hill is because we don't necessarily need open path to be on every impression in fact, we have no expectation that it will but.
Speaker Change: We will have a run often enough, especially with the largest players on the open internet can know how to grade the all the other supply chains all the other ways that we could potentially buy.
Speaker Change: I show that we hold it accountable to be as efficient as possible.
Speaker Change: The way I view this as a race between walled gardens in the open internet to create the most efficient supply chain walled gardens have any advantage.
Speaker Change: On one level, which is that they control at all but they operate at a disadvantage because they only operate with UGC and they only operate with podcast that has a very low cost of goods sold and don't have the appeal of all of the best parts of the open Internet, which I think we described well in the prepared remarks the Atlanta.
That we have is not only do we have the premium side of the open internet.
Speaker Change: But we also have the horses of capitalism loved competition of all the things that make markets great that we can partner with so many different companies and through a collection of efforts.
Speaker Change: Outperform in any single one company I don't think you can count on any one company is being the source of all innovation and we've got a business model that I don't think it goes out of style the way that many destinations do.
Speaker Change: And so in order for us to be.
Speaker Change: A company that services the entire open internet.
Speaker Change: I believe it is essential for us to have a product like open path. So it's a really critical part of our present and future and really appreciate the question. Jessica So we had a platform to talk about it more.
Speaker Change: Thank you.
Speaker Change: Thank you. Your next question is coming from scratch a cause urea from Wolfe research your.
Speaker Change: Your line is live please go ahead.
Speaker Change: Thank you for taking my question, Jeff I have one on CTV growth. So like your largest and fastest and you have a lot of catalysts that enable healthy sustainable growth in C. T V. So when you think about the drivers Oh, whether they call. It next two to five years, how would you rank order the impact of secular Gail.
Speaker Change: In Q third party partnerships that you may expand forward product international expansion.
Speaker Change: Rising levels, that's you know ask Jack or AI and that that will be used in measuring or anything else like how can you. Please help us unpack key drivers that will allow you to sustain growth at a healthy clip in the near to mid term and then the follow up is how do you see Amazon evolves as a DSP.
Speaker Change: Over the same timeframe. Thanks a lot.
Okay.
Speaker Change: Thanks for the question Oh, you did a pretty good job of laying out all the other key secular drivers for us the tailwind that are helping us.
Speaker Change: The first and foremost it over the last few years theres been at times anxiety about will there.
Speaker Change: Be walled gardens.
Speaker Change: In CTV not because we ever thought that was a viable path because I believe that is not a viable path.
Speaker Change: Because it's too fragmented.
Speaker Change: But instead.
Speaker Change: What.
Speaker Change: What all of the major players have.
Speaker Change: Come to understand is that when you have a premium product.
The very best way to get the most out of it is to auction that al.
Speaker Change: And of course to describe it in great detail.
When you're not selling an average product you have to describe it better.
In order to get the premium that you deserve and that's true, whether you're selling cars or art or ads.
Speaker Change: And I would also add that conflict of interest.
Speaker Change: Is.
Speaker Change: Is.
And even more interior playbook.
Speaker Change: CTV than it is in any other channel or any other corner of media.
Speaker Change: So as a result I would argue.
Of the Amazon operates at a much bigger disadvantage in CTV than than in any other channel. So we've argued against Google is lack of objectivity and every other part of the open internet and they've been a less of a competitor in CTV Amazon has been more of a competitor in CTV, but I think Google was a.
Speaker Change: A more formidable competitor in the other parts of the open Internet and Amazon is in CTV.
Speaker Change: It is simply because of that conflict of interest they are going to be pushing ads on premium content that they own. Meanwhile, neglecting premium content that others, one while we have no dog in the hunt and we're just trying to help people objectively decide do I buy the add on Netflix or do I buy the add on Hulu.
Speaker Change: <unk>.
Speaker Change: Or somewhere else.
Speaker Change: As a result, you take all of the partnerships that we've put together and I think those are a significant driver.
Speaker Change: Driver for our growth in the future.
Speaker Change: Okay.
Speaker Change: A couple of years ago, I would've said that we werent, leading the CTV market in Australia and in the United States that has expanded to other markets like the U K into Germany, but there are still way more opportunities around the world.
Speaker Change: As I mentioned in last quarter I was I was in India.
Speaker Change: And then over the summer.
Speaker Change: The opportunities there and every channel.
Speaker Change: Especially in CTV and audio.
Speaker Change: Or are just spectacular and so the opportunities that exist for us.
Speaker Change: Around the world couldn't be better.
Speaker Change: We've also established UAV too, it's not only the currency of the open internet, but it is especially the currency.
Speaker Change: Of of connected TV.
Speaker Change: In a way that's the way it became the currency of the open Internet is because.
Speaker Change: CTV.
Speaker Change: So what what I think is the most significant thing to watch over the next couple of years.
Speaker Change: It is a.
Speaker Change: So many content owners.
Speaker Change: I have put ads on their content now.
Speaker Change: What was once a shortage.
It is no longer the discussions how long of a discussion about scarcity or about shortages of inventory.
Speaker Change: And so as a result, they are trying to distinguish themselves from each other this is what has been the case.
Speaker Change: And streaming wars, but now that's also true of the AD experience in the streaming wars.
Speaker Change: And so they will be describing their inventory better than they have historically.
Speaker Change: We will have more choice than we have historically.
Speaker Change: Think that the premium content, we will do better.
Speaker Change: I think the content that has identity attached to it we'll also do better.
I think that positions CTV to do really well.
Speaker Change: But there will be a lot of work done over the next couple of years for them to layer identity as well as other metadata to give buyers the very best chance to value a properly and to pay the premium that they need in order to continue to fund their massively expensive content machines. So hope.
Speaker Change: That helps I really appreciate the question.
Speaker Change: Thanks, Yes that is helpful.
Speaker Change: Thank you. Your next question is coming from Laura Martin from Needham.
Speaker Change: Laura Your line is live. Please go ahead okay.
Speaker Change: Great. So Chuck I'm, just going to ask you one of the hardest question I guess.
Speaker Change: And that is that trade desk is probably two to three times faster than other assets teams and even those that are public.
Speaker Change: Well is there a tipping point at which you eat too much of your competitors you take so much share and there isn't an open internet for you to compete with or trade with and therefore your grass gets limited by the fact that you must have trading partners on the other side and on the same side of the opening night. Thank you.
Speaker Change: Alright, thanks for the question.
Speaker Change: I like this one a lot I didn't I didn't see this one coming.
Speaker Change: So.
Speaker Change: Big picture I believe that the advertising ecosystem around the world is about a trillion dollar industry today, especially when you include retail media.
Speaker Change: I think it's.
About that today.
Speaker Change: Lots of different numbers out there that aren't that too far away from that but it just depends on whether you include retail in that or not.
Speaker Change: If you look at what we're doing 13 14 billion.
Speaker Change: A year at this point.
Speaker Change: We're.
Speaker Change: Just over 1% of that trillions.
Speaker Change: I look at it is we have 99% of the pilot.
Speaker Change: And there's so much opportunity for us to do more.
Speaker Change: As I'm looking at that pie and say, how do we not get distracted by all the different ways that we could go at all the different things that we can build and parts of the pie we could pursue.
Speaker Change: How do we stay focused.
Speaker Change: I look at the biggest piece of the pie.
Speaker Change: Okay. There is the U S.
Speaker Change: There's a C T V.
Speaker Change: Uh huh.
Speaker Change: And of course.
Speaker Change: Up and coming channels like like audio.
Speaker Change: But those represent I think the most premium opportunities for us to go pursue.
Speaker Change: I guess I.
Speaker Change: I would point back to the comments in the prepared remarks about.
Speaker Change: We think that every company in the AD tech needs to add more value than they charge or extract some of the companies in the ecosystem don't think that way they think about Oh.
Speaker Change: Charging ranch, our extraction and.
Speaker Change: There's often a mindset that is ride the wave wallet loss instead of how do I build something that really loss that are adding more value over time.
Speaker Change: Trading more consumer surplus where your consumer or your client gets more value overtime.
Speaker Change: And therefore, making it more and more sustainable and making your customers more and more loyal.
Speaker Change: I think theres a lot of pressure out of the companies in the middle including some of those that you referenced.
Speaker Change: And then they have to be focused on adding more value than they extract.
Speaker Change: If we do the right thing for advertisers.
Speaker Change: And then give visibility to publishers that will create a more effective supply chain and that is the biggest.
Speaker Change: And peter or or or or roadblock for our growth is an inefficient supply chain. So we need to make certain that.
Speaker Change: The supply chain is as efficient as possible.
Speaker Change: And and that means partnering with all of those companies that are adding more value than the extract and continuing to obsess about the supply chain.
Speaker Change: But I don't have any worry that we can cannibalize the market or 1% of it.
Speaker Change: So I think there's just so much opportunity for us ahead.
John: Thank you thanks John.
Speaker Change: Thank you. Your next question is coming from Justin Patterson from Keybanc. Justin Your line is live. Please go ahead.
Speaker Change: Alright, Thank you, Jeff I wanted to touch on the audio opportunities to more obviously, we all saw that Spotify AD exchange announcements when you can step back and you compare where we were at Westside audio versus C. T V. What are some of the key things that need a change in the industry for this to become a much.
Speaker Change: Larger percentage of the business I think audio still roughly 5% of your spend today. Thank you.
Jeff Green: Yeah. Thanks, Justin for the question I think.
Jeff Green: Audio is in a slightly different position in CTV.
Speaker Change: The sense that well.
Speaker Change: When it was a more legacy business.
Speaker Change: Meaning before the Internet changed everything.
Speaker Change: The distribution models or more around local in the way radio sold ads was just different than the way TV sold out.
Speaker Change: And.
Speaker Change: There is less of a sense of national.
Speaker Change: And of course in CTV now Theres more of a sense of even global.
Speaker Change: And of course in audio Theres, a very global sense inside of businesses like Pandora and Spotify.
Speaker Change: So I because things are being redefined I think people have wrongly.
Speaker Change: Define the Tam has been something.
Speaker Change: Quite small.
Speaker Change: Where when you look at time spent and you look at the amount of engagement with audio content is really off the charts and represents a tremendous amount of consumers' time.
Speaker Change: So that's why I mentioned in the prepared remarks, if companies like Pandora and Spotify and so many others.
Speaker Change: Execute well I.
Speaker Change: I think theres, just tremendous upside for them of course.
Speaker Change: I watched carefully when.
Speaker Change: I see in their earnings.
Speaker Change: No, 10% to 13% of their revenue comes from ads, but most up there.
Speaker Change: Most of the subscribers or most of their users are asking for ads.
Speaker Change: And so I think that represents a tremendous opportunity for them I'm, a big believer in Daniel and Alex.
Speaker Change: I'm I believe they're on they're on the path to get there.
Speaker Change: But theres a lot of work ahead, there's a lot of development that has to happen. This is gonna be a multiyear process.
Speaker Change: But I'm I'm extremely.
Speaker Change: STREAMWAY optimistic about what that means for the future and think that it can represent a greater percentage of our business than it does today and I think that audio can be a bigger percentage of the overall pie than it's arguably ever been before.
Speaker Change: I don't know that that will necessarily take or cut in CTV.
Speaker Change: And premium video at all but I do believe from some of the other channels and will and should so I'm pretty optimistic about the future of Spotify.
Speaker Change: An audio but.
Speaker Change: But we all have a lot of work to do.
Speaker Change: Thank you.
Speaker Change: Thank you. Your next question is coming from Dan Salmon from New Street Research and your line is life. Please go ahead.
Speaker Change: Okay, great. Thanks, good afternoon, everyone.
Speaker Change: Laura you highlighted that political was strong as expected any more you can do to quantify its expected impact for 2024 revenues implied by your guidance I think it was a mid single digit impact in the last presidential cycle and Jeff you called out how some advertisers will step out of the market or get crowded.
Speaker Change: I hope by higher pricing and some that markets do you think those dollars that lapsed can offset political partially offset it just trying to think about the impact of that on our 2025 models and maybe just one quick follow up to slip in if you could just give us your updated views on capex for the remainder of the year and how you're thinking about it into two.
Speaker Change: 25, thank you.
Speaker Change: Okay. Thanks for the questions and absolutely happy to answer you know we went into the last political cycle. The last big one back in 2020, saying that political spend was in the mid single digits and we believe for this year of 'twenty 'twenty four it'll be in the low single digits as a percent of our overall spend when.
Speaker Change: When we think about how we consider political in Q4, and then go into thinking about how we're modeling going into 2025, it's a really a nuance but important question. This year typically what we see is that Q1 is on average at 22, 23% sequential decline from Q4 and in political years, it's critical to exclude.
Speaker Change: That political contribution in Q4, which we believe again will be a low to mid single digit percent for that quarter as we go into modeling Q1 of 2025.
Speaker Change: And the second part of your question, which includes capital expenditures for 2024, and 2025, we've said and been consistent that we expect capex to increase in 'twenty 'twenty, four and 'twenty 'twenty five but in both cases, it can be around 5% of revenue and that Hasnt changed we invest primarily in two areas.
Speaker Change: That's the first thing our infrastructure, which includes data centers and the second being our offices around the world as we have employees, who are you know coming into work every week. So again just want to reiterate there that we don't expect any significant changes to capex this year or next year relative to the last few years.
Speaker Change: Ken as it relates to the part of the question that was directed to.
Speaker Change: To me the the.
Speaker Change:
Speaker Change: The 'twenty 'twenty four that was taken out.
Speaker Change: Uh huh.
Speaker Change: Meaning those advertisers that spend a little bit less in 2020 for Q4, because they don't want to be next to political will be back in 2025.
Speaker Change: Of course in fact in many cases in Q4 it didn't go anywhere it just got.
Speaker Change: Postponed or got moved to other channels.
Speaker Change: So it doesn't it doesn't necessarily go anywhere.
Speaker Change: It just it just reallocated its form.
Speaker Change: But in 2025.
Speaker Change: We think the cycle is a bit more.
Speaker Change: Typical.
Speaker Change: And rates are more predictable and then it's also a little bit easier to predict.
Speaker Change: Uh huh.
Speaker Change: The shape of the curve throughout the quarter simply because you don't have a big Ah.
Speaker Change: Change on November 5th.
Speaker Change: Great. Thank you both.
Speaker Change: Thank you Nicole next question is coming from Jason <unk> from Oppenheimer. Jason Your line is life. Please go ahead.
Speaker Change: Thanks for taking the question so I'm, Jeff you highlighted or I guess in the press release the Yahoo.
Speaker Change: Roku integration in the quarter and I guess I wanted to ask how does this play into your broader CTV strategy around you I D and buying on duplicated reach and frequency and it's fair to assume you'll have similar integrations with top whatever it is three or four CTV platforms. Thank you.
Speaker Change: You bet. Thank so much for the question.
Speaker Change: I'm so proud of what we've done with Roku. This year you know we've had a longstanding relationship with them.
Speaker Change: But it's really.
Speaker Change: Borne fruit in this year.
Speaker Change: It really represents a significant change.
For them as it relates to adopting things like Q I D to an end.
Speaker Change: Some of the.
Speaker Change: The principles of the open Internet.
Speaker Change: But of course, the Roku channel has grown tremendously for them and they have become not only a partner for us.
Speaker Change: As a distributor of others content, but also our premium publisher themselves.
Speaker Change: I'm, so excited by what they've done with UAV too.
Speaker Change: And because of some of the assets they have with with ACR and whatnot.
Speaker Change: I expect our partnership to continue to grow in the coming years. So.
Speaker Change: I'm very optimistic about our partnership with Roku.
Speaker Change: I expect that to continue to expand.
Speaker Change: And very much appreciate the question. Thank you.
Speaker Change: Thank you.
Speaker Change: Our final question today will come from Matthew Swanson from RBC capital markets. Matthew Your line is life. Please go ahead.
Matthew Swanson: Yeah. Thank you so much for taking my question.
Matthew Swanson: If I could maybe marry up a couple of the factors you talked about Jeff specifically the idea that Cmos are under more pressure and then also some of the capabilities and the traction youre seeing from Coke is I guess, what type of work does it take to help Cmos in the users understand the metrics coming out of Coke habit, Cai, but all.
Matthew Swanson: Also to kind of gain trust around them, but I know that's been a challenge in some other walled garden platforms. So people trusting the attribution data.
Yeah, So oh.
Speaker Change: If it's I really appreciate the question because I think this is one of the more nuanced ways that we have just so much opportunity in front of us.
Speaker Change: Honestly, we weren't we were contemplating.
Speaker Change: Adding other macro factors that are that are helping us.
Speaker Change: And one of them is the state of measurement, which would've been.
Speaker Change: A number of 11 <unk>.
Speaker Change: But the.
Speaker Change: The state of measurement is that a walled gardens have essentially been grading their own homework for many many years and one of the things that they've done really well is convince people to use their own metrics.
Speaker Change: And Kevin things quite simple.
Speaker Change: But at times, that's been really difficult for some of the biggest brands in the world because that'll be told by a walled garden.
Speaker Change: We helped you sell a 101 toothbrushes.
Speaker Change: The company actually only sold 100 toothbrushes total.
Speaker Change: So when you have that phenomenon and you start to doubt that.
Speaker Change: Credibility of those metrics we.
Speaker Change: We have a very different.
Speaker Change: Lemme or or challenge, which is that we've been sharing so much data with them and giving them. So many options about the way to attribute success and attribute sales.
Speaker Change: We've overwhelmed them with complexity and with numbers and there are so many different ways for us to answer those questions, but because we're committed to doing that with integrity and with objectivity.
We'd rather have a conversation with them about how do you want to measure success, there's a whole bunch of different ways to do it let US help you put together the one that makes sense for you.
Speaker Change: So as CMO and CFO as get closer together in their offices.
Speaker Change: Some cases moved closer together.
Speaker Change: As they get closer together there a lot of our discussions in fact, some of our biggest wins in last quarter and this one have Tom.
Speaker Change: From us understanding what the CFO is looking for from the CMO. So that we can go back and put together the metrics that prove.
We're creating incremental sales or growth.
So it is largely about figuring out what they are looking for and us getting better at not making everything bespoke and reinventing the wheel, but at the same time not oversimplifying it assuming that we have all the answers.
Just great our own homework with a single metric.
Speaker Change: So I'm very optimistic about what that means for the future because I do think there is a very important principle that we have been saying since the day, we went public which is objectivity matters a lot today.
Speaker Change: But it will matter more tomorrow and it will matter more of the day after that.
Speaker Change: As time marches on and we think that that continues to be one of our greatest strategic advantages over the biggest names in tech.
Speaker Change: Thank you.
Speaker Change: This does conclude today's Q&A session and conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.
Speaker Change: Goodbye.